WASHINGTON — An index of consumer prices closely watched by the Federal Reserve registered a high level last month, a contrary signal about inflation in the United States that is disseminated by the Fed and repeated by the major media and news agencies.
Prices rose 3% in June from the same month a year earlier, when inflation hit 9.1%, the worst figure in five decades.
If the month of May is taken into account, the data shot up 3.8% annually, when the inflationary level was 8.6%. That is to say, the inflation figures of the fed have a high load of doubt about their true certainty.
Prices increased 0.2% from May to June, compared to 0.1% in the previous month. However, the annual inflation figures that the Federal Reserve continues to give continue to decline (contrary to the reality experienced by consumers) when it comes to shopping. Especially since food and fuel prices are now excluded from the analysis of the Central Bank
The drop in annual inflation last month largely reflected lower gasoline prices, as well as milder increases in food prices.
Regarding official data, the basic price index, which excludes volatile items such as food and fuel, continued to be quite high. Those underlying inflationary pressures are the main reason the Fed raised its short-term interest rate to its highest level in 22 years on Wednesday.
In a separate report Friday, the Labor Department revealed that an index of wages and salaries increased more slowly in the April-June quarter, indicating that employers are feeling less pressure to raise wages as the job market reportedly cools. .
Remunerations, excluding those of public employees, increased 1% in the previous quarter, compared to 1.2% in the first three months of 2023. For the year, wages and salaries increased 4.6%, compared to 5, 1% in the first quarter.
The Fed carefully watches the so-called job cost index. Slowing wage increases should curb inflation over time because companies are less likely to have to raise their prices to offset rising labor costs.
The inflation report released Friday by the Commerce Department is quite contradictory, saying that Americans’ willingness to keep spending continues, despite two years of high inflation and 11 Fed rate hikes in 17 months. However, the true analysis is that spending increased due to the high prices that remain and suffocate the majority of American families who must buy to feed themselves, be able to work and pay high bills.
More than 48% of Americans barely make ends meet.
Consumer spending increased 0.5% from May to June, compared with 0.2% the previous month, driven in large part by deep discounts from chain stores and restaurants on the brink of bankruptcy.
FOUNTAIN: With information from AFP
